Your Guide to Ripple

Before getting started, the first thing to keep in mind is that Ripple operates as both a platform and a cryptocurrency. Ripple’s platform is essentially an open-source designed to facilitate accelerated and cost-efficient transactions. As opposed to BTC, the mother of all cryptocurrencies, Ripple was designed to operate as a new-age payment platform, where Bitcoin was never meant to serve just that purpose.

As it seems, Ripple is on a path to fully operate all global transactions, which in itself is quite the goal although as known with the world of crypto, nothing is set in stone and cryptocurrency exchanges may cease to exist altogether. The other Ripple, XRP, is the platforms native coin and enables all its platform users to create theirs through RippleNet, which brings us to our next topic.

One Big Network

RippleNet is essentially a consortium, or network, connecting financial payment service providers like banks and monetary services utilizing new innovations and solutions created by Ripple to conduct faster, stronger and more efficient business and simplify the entire process of sending funds internationally.

To explain through an example, user 1 lives in California and owns a TV that isn’t needed. This user wants to attend a certain event yet doesn’t have a pass. On the other hand, user 2 lives in Chicago and owns a watch but is looking to trade this watch for a TV. User 3 lives in Seattle and wants to trade their ticket to the event user 1 wants to attend. Normally, none of these individuals would have a clear means of finding each other and trading their products. Using Ripple, the platform would search for the quickest and most cost-efficient method of bringing these three together to facilitate a trade.

Additionally, Ripple’s platform enables any user to pay in whatever cryptocurrency they possess, including BTC and will charge next to nothing for any transaction between users with the cost of a single transaction being $0.00001. Transactions on the platform, although as cheap as they can possibly be, are not free as a means of protecting the platform and users from a Distributed Denial of Service attack, more commonly known as DDoS.

The Coin

Ripple’s native coin, XRP, is a transfer value representative throughout the company’s entire network. XRP’s primary objective is acting as a medium for other digital coins and fiat currency exchanges. XRP acts as a “Jack of all trades” in that the cryptocurrency can essentially act as others and provide services for all coins. When looking to exchange USD to EUR, cutting down on the cost of a commission can be achieved through trading a dollar with a dollar or a euro with a euro and as previously mentioned, transactions on the platform as cheap as they possibly can be.

One interesting note to keep in mind is that once a transaction is completed, the transaction fee, set at $0.00001 will vanish and cannot be restored on the platform meaning that each transaction contributes to $0.00001 disappearing from the world and occurs to protect the platform and users from potential spam attacks.

The Creative Minds

Ripple’s protocol itself was launched over a decade ago in 2014 as an operational prototype although 2013 can be considered the year in which Ripple actually began operating. This comes right after EDonkey’s network creator, Jed McCaleb, pulled in some of the world’s elite-ranking investors to pour funds into Ripple Labs.

Chris Larsen is a private or seed investor. Additionally, Larsen is an executive and a loud advocate of privacy and is generally thought of as the wealthiest individual in terms of digital currencies. For Chris Larsen, his reputation largely comes as a result of his many investment endeavors, known to support and fund, as well as co-founding, many online financial startups, most notably his first investment in E-loan in 1996.

Jed McCaleb is a distinguished computer program specialist and businessman. McCaleb has co-founded many of the world’s well-known startups operating in crypto such as Ripple, Stellar and Mt.Gox digital currency exchange although he had sold off all his shares long before the massive and controversial hack on the platform. Mt.Gox, during its height of success, was operating and managing more than 70 percent of every single Bitcoin transaction around the world.

Explaining the RPCA

One thing that separates Ripple from BTC or Ethereum is that Ripple does not own its own blockchain. Now, this may come off as confusing or strange due to the fact that cryptocurrencies and blockchains are essentially an unbreakable duo. Additionally, blockchains are needed to verify any transactions and maintain order and ensure that everything operates as it should. To deal with this, Ripple utilizes its very own special tech, the protocol consensus algorithm designed for Ripple or RCPA for short.

The “consensus” part refers to every operational node on the network and no problems should occur if every node complies with one another. To set an example, imagine a room with 50 individuals with the power to collectively decide on one thing. If all 50 members agree together, they can change laws, approve construction, raise or lower taxes and charges or anything else.

What does it do?

Ripple, the coin, and the platform, are utilized for several purposes. First off, Ripple charges incredibly low transaction fees. Many currencies cannot be cross-converted right away and in this case, financial institutions will need to use the USD as a medium which results in double the commission. One currency will first be converted to the USD which will then be converted to the desired currency. Ripple also acts as a medium for this type of exchange although, as previously mentioned, the cost is next to nothing.

Another feature is that Ripple facilitates accelerated transactions on an international level. Each transaction takes about four seconds to go through, unlike Bitcoin which can take up to an hour or more and banks which are known to take days at a time.

It also enables users to create their currency as a means of quicker and cheaper transactions. A user can create and use their own currency to scope through their interests on the market, whether buying movies or posters or anything else among other collectors or sellers.

How will using Ripple benefit everyone?

Ripple’s original design and purpose is to act as a daily payment system which makes it more efficient than BTC. In light of this, transactions are incredibly fast and cost way less.

Ripple was launched as an officially recognized company for the purpose of being utilized by financial institutions like banks. In this regard, the organization doesn’t need to fully comply with regulations or be subject to mandated checks like other digital currencies are.

Additionally, Ripple can be used as an exchange tool for any currency or other valued assets like diamonds with a single, incredibly minor commission fee. Many banks back and support Ripple in their systems, including UBS, Axis Bank and more.

Should I invest?

Before going on, it’s important to remind ourselves that a fully guaranteed, 100 percent secure investment does not exist. Each choice has its own possible consequences and risk and only an investor can decide on what’s best for them. In this regard, thorough research and understanding of how investments and Ripple work is strongly recommended.

Now, just like any other company or product, Ripple has it's good and bad. To start off with the good reasons as to why an investment in Ripple is a good idea is that first, as previously mentioned, Ripple is an officially recognized and registered organization and is supported and trusted by many banks and is not a new startup or blockchain emerging out of nowhere.

Ripple is also fully mined and its tokens are in circulation which means that inflation is not an issue. Ongoing, as more banks continue and begin using Ripple as their own platform for facilitating transactions, XRP’s price will climb higher. Should every bank begin using Ripple as an international financial currency as opposed to continues processing for redundant trading platforms or exchanges, those that have invested earlier in Ripple will gain massive profits from their investments.

Now, with all the great benefits, a few cons are expected as well. First off, Ripple is incredibly centralized. The very core nature of cryptocurrencies is that they remain decentralized as to avoid full control by an authoritative figure. Seeing as how all XRP has already been mined, the platform's developers also hold the power on when and how much of the coin to release or hold which essentially makes an investment similar to that of pouring funds into a bank.

Apart from its centralization, Ripple also owns over 60% of its own coins, essentially monopolizing them. Ripple is also designed as an open-source, which offers transparency for users but also leaves the platform susceptible to hacks and other cyber-attacks and given the rate of successful and evolving attacks, it may possibly occur.

Opposition and Criticism

Even though many elite banks are part of a huge group with plans on utilizing the company’s platform, according to reports, a majority of these banks are still testing out the platform and how they’ll be using its services. The minor number of banks facilitating transactions with fiat currency is using Ripple without XRP which may prove that banks have no actual interest in the digital coin.

Ripple can also freeze, pause or reverse a transaction. The prime example of this occurring is when Jed McCaleb, attempted to sell off over $1M in XRP, his transaction was denied and reversed. Rumors began circulating, mainly saying that McCaleb was directly violating the contract although freezing a transaction directly contradicts digital currency fundamentals and principles.

As for what many of the leading minds in the cryptocurrency industry think of Ripple, the chief executive officer of Pinnacle Systems, Roman Guelfi-Gibbs has stated that Ripple definitely has what it takes to make a step forward this year, although he believes it will most likely occur next year. While markets monitor more of these projects utilizing algorithms and coding like XRP, Ethereum will fall behind the next significant cryptocurrency.

He believes markets will also move at their own pace in terms of acceptance and according to him, he predicts that 2019 will be the appropriate year for these events to occur. He does, however, state that cryptocurrencies, as is well-known, are incredibly unpredictable and anything can happen over a day or night. Others like John-Paul McCaffery of Long Island University believes that even though no current crypto-exchange platform exists for converting fiat into XRP, one may soon emerge.